Shri Sureshchandra Chandrakant Mashruwala, Ahmedabad V. The Income tax Officer,(OSD)Range-2, Ahmedabad

ITA 2118/AHD/2012

• Counselvise Citation: 211820514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 25-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: T H VASA
• Keywords: Gift; Depreciation

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , !' # ' !' # ' !' # ' !' # ' BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.2118/AHD/2012 [ASSTT.YEAR : 2005-2006] SURESHCHANDRA CHANDRAKANT MASHRUWALA 701, AMBIANCE, JUDGES BUNGALOWS ROAD SATELLITE, AHMEDABAD 380 054. PAN : ABSPM 7315 B /VS. ITO, (OSD) RANGE-2, AHMEDABAD. ( (( (%& %& %& %& / APPELLANT) ( (( ('(%& '(%& '(%& '(%& / RESPONDENT) )* + , #/ ASSESSEE BY : SHRI T.H. VASA . + , #/ REVENUE BY : SHRI D.K. MISHRA, SR.DR / + *01/ DATE OF HEARING : 10 TH DECEMBER, 2013 234 + *01/ DATE OF PRONOUNCEMENT : 10-01-2014 #5 / O R D E R THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-2006 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-6, AHMEDAB AD DATED 17.7.2012. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ONLY EFFECTIVE GROUND OF APPEAL OF THE ASSESSEE IS GROUN D NO.1, WHICH IS REPRODUCED BELOW: ITA NO.2118/AHD/2012 1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIONS OF RS.5,74,430/- AND RS.33,100/- TO T HE RETURNED INCOME BY THE AO U/S.143(3) OF THE IT ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE WAS A SENIOR CITIZEN OF 76 YEARS OF AGE DURING THE RELEVANT PERIOD AND HAS RECEIVED NRI GIFTS FROM CHILDHOOD FRIENDS AT THE TI ME OF HIS HOUSE- WARMING CEREMONY ON 19.7.2004. HE SUBMITTED THAT T HE TOTAL AMOUNT IN INDIAN CURRENCY OF GIFTS RECEIVED COMES TO ` 5,74,430/-. THE DETAILS OF GIFTS RECEIVED HAVE BEEN FILED IN THE COMPILATION W HICH SHOWS THAT THE MAIN GIFT IS OF INDIAN ` 4,91,846/- WAS FROM MR.MAHESH GANDHI. HE SUBMITTED THAT SHRI MAHESH GANDHI IS A QUALIFIED CH ARTERED ACCOUNTANT AND A CHILDHOOD FRIEND OF THE ASSESSEE AND HAS SETT LED SINCE LAST 40 YEARS IN NEW YORK (USA) AND THE GIFT IS MADE OUT OF PERSO NAL AFFECTION. THE COPY OF THE CONFIRMATION OF THE DONOR, PASSPORT COP Y AND THE ACCOUNT PAYEE CHEQUES HAVE BEEN FILED IN THE COMPILATION BE FORE THE TRIBUNAL. HE SUBMITTED THAT NO NRI GIFT IN THE EARLIER YEARS OR IN THE SUBSEQUENT YEARS WAS RECEIVED BY THE ASSESSEE. THE LEARNED D R HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE . HE SUBMITTED THAT THE CREDIT-WORTHINESS OF THE DONOR WAS NOT PROVED B Y THE ASSESSEE. MOREOVER, THE DONOR SHRI MAHESH GUPTA HAS NO RELATI ON WITH THE ASSESSEE, AND THEREFORE, THE ADDITION WAS RIGHTLY M ADE BY THE DEPARTMENT. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND ALSO COPIES OF VARIOUS DOCUME NTARY EVIDENCES FILED BY THE ASSESSEE IN COMPILATION BEFORE THE TRI BUNAL. I FIND THAT OUT OF TOTAL GIFTS RECEIVED BY THE ASSESSEE DURING THE YEA R AMOUNTING TO INDIAN ITA NO.2118/AHD/2012 ` 5,74,430/-, THE MAJOR AMOUNT IS THAT OF GIFT OF SHR I MAHESH GANDHI OF INDIAN ` 4,91,846/-. SHRI MAHESH GANDHI IS STATED TO BE A C HILDHOOD FRIEND OF THE ASSESSEE. HE HAS FILED CONFIRMATION LETTER IN SUPPORT OF THE GIFT AND HAS STATED THAT THE GIFT WAS GIVEN AT THE TIME OF HOUSE-WARMING CEREMONY AT THE NEW RESIDENTIAL PROPERTY, THE ASSES SEE HAS PURCHASED. THE DONOR HAS FURTHER CONFIRMED THAT THEY WERE TENN IS PLAYING GROUP AND THE GIFT WAS GIVEN FROM ALL THE TENNIS PLAYING GROU P LOOKING TO THEIR LONG STANDING FRIENDSHIP FOR 35 YEARS. HE HAS FURTHER C ONFIRMED THAT HE HAS KNOWN THE ASSESSEE VERY CLOSELY FOR THE LAST 45 YEA RS AND THE DONOR IS WELL ESTABLISHED IN USA HAVING GOOD EARNING AND INCOME A ND IS PAYING TAX IN USA. THE COPY OF THE GIFT CHEQUE, PASSPORT COPY AN D POSTAL ORDERS ETC. OF SHRI MAHESH GANDHI AS WELL AS OTHER FRIENDS AND COL LEAGUES HAVE BEEN FILED IN THE COMPILATION BEFORE THE TRIBUNAL. THE ASSESSEE HAS NOT RECEIVED NRI GIFTS IN EARLIER YEARS OR IN THE SUBSE QUENT YEARS. IN THESE FACTS OF THE CASE, I HOLD THAT THE ASSESSEE HAS DIS CHARGED ITS ONUS OF PROVING THE IDENTITY AND CREDIT-WORTHINESS OF THE D ONOR AND THE GENUINENESS OF THE TRANSACTIONS OF THE GIFTS RECEIV ED BY HIM. MERELY BECAUSE THERE IS NO BLOOD RELATION OF THE ASSESSEE WITH THE DONOR, IS NO GROUND TO REJECT THE EVIDENCE PRODUCED BY THE ASSES SEE IN SUPPORT OF THE CLAIM OF THE GIFT, WITHOUT BRINGING ANY ADVERSE MAT ERIAL ON RECORD. THE OTHER GIFTS ARE OF SMALL AMOUNTS AND FOR THAT ALSO THE ASSESSEE HAS FILED NECESSARY EVIDENCES ON RECORD. IN THESE FACTS, I H OLD THAT NO CASE OF ADDITION OF ` 5,74,430/- COULD BE MADE OUT BY THE REVENUE, WHICH IS ACCORDINGLY DELETED. 5. THE ONLY OTHER ISSUE IS REGARDING DISALLOWANCE O F ` 33,100/- OUT OF VARIOUS EXPENDITURE CLAIMED BY THE ASSESSEE. I HAV E HEARD THE PARTIES. I FIND THAT THE DISALLOWANCE IS MADE ON ACCOUNT OF EL EMENT OF PERSONAL USE ITA NO.2118/AHD/2012 OUT OF TELEPHONE EXPENSES, CAR EXPENSES, CAR INTERE ST AND CAR DEPRECIATION. THE DISALLOWANCE BEING REASONABLE, THE SAME IS CONF IRMED AND THE GROUND NO.1 OF THE ASSESSEE IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD